Physician Compensation on the Rise, Marking Post-Pandemic Recovery

Physician practices are on the road to post-pandemic recovery in 2021, as physician compensation and productivity is rising again, the Medical Group Management Association (MGMA) recently reported.

The findings are from MGMA’s annual Provider Compensation and Production Report, which examines data from more than 192,000 physicians and non-physician providers in over 7,700 organizations.

“As we continue to emerge from the pandemic, I'm pleased to announce that data trends are more than stable, despite the countless challenges the industry has experienced over the past two years,” Halee Fischer-Wright, MD, MMM, FAAP, FACMPE, president and chief executive officer at MGMA said in the press release. “Providing a more holistic view of the industry, the insightful and actionable data in this report is invaluable for healthcare practices — both today and for ongoing future planning.”

The report also revealed that compensation for most physician-owned practices met or exceeded pre-pandemic levels, outperforming the flat results from the year prior.

Compensation for primary care, surgical and nonsurgical specialists, and advanced practice providers increased.

Non-surgical specialists had the biggest decrease in median total compensation in the first year of the pandemic. However, they experienced a 3.12 percent increase in compensation from 2020 and a nearly 2 percent increase compared to 2019.

Surgical specialist physicians, who saw the second-largest decline in compensation from 2019 to 2020, had a tremendous rebound Their average compensation reached $517,501, representing a nearly 4 percent increase from 2020 to 2021.

In 2021, providers coming out of residency and newly hired to a practice earned 7 percent to 10 percent more in guaranteed compensation than those hired in 2020.

Surgical specialist physicians, who had the second-largest drop in compensation from 2019 to 2020, rebounded with a nearly 4 percent increase from 2020 to 2021, as median total compensation reached $517,501 last year.            

Despite most providers gaining larger increases in pay, compensation for providers varied dramatically by state.

From 2019 to 2021, primary care providers and advanced practice providers in the Southern and Western regions experienced moderate increases in compensation.

Primary care physicians in the south experienced a 7.29 percent increase in compensation compared with a 2.24 percent increase for primary care physicians in the eastern region.

Additionally, primary care physicians in Mississippi currently earn the most pay, making about $102,000 more in total compensation than their counterparts in Arizona.

The geographic disparities in surgical and nonsurgical specialist pay are even more drastic. In Nevada, surgical specialty physicians earn more than $600,000 more than their counterparts in Idaho.

Further, nonsurgical specialty physicians in Mississippi earn $372,000 more than their counterparts in Idaho.

In 2021, medical practices were able to restore a sense of normalcy in productivity, MGMA pointed out.

Overall physician production increased 14.3 percent from 2020 to 2021, with advanced practice providers having the largest gain for that year at 16.58 percent.

The compensation per work relative value unit (wRVU) ratio for advanced practice providers increased 6.06 percent above 2019 levels in 2021. Meanwhile, wRVU increased 1.16 percent for primary care physicians.

This increase in productivity is happening while physician practices are going through significant challenges. Even though COVID-19 has subsided, physician burnout and disruptive patients have not, MGMA stated.

One in five physicians intends on leaving their practice in the next two years because of employee burnout, a threat to the healthcare field itself.

“As the healthcare industry continues to achieve a new "normal," practices are searching for ways to keep productivity and revenue high,” wrote MGMA. “Comprehensive data is key for practices as they look to understand how to consistently optimize daily operations.”